One Kings Lane: Decor site confronts competition

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Published 4:00 am, Sunday, November 6, 2011

Doug Mack, Chief Executive Officer, of the San Francisco based, One Kings Lane, an online home goods and furniture sales website, sits in the company headquarters Wednesday morning, November 2, 2011.

Doug Mack, Chief Executive Officer, of the San Francisco based, One Kings Lane, an online home goods and furniture sales website, sits in the company headquarters Wednesday morning, November 2, 2011.

Photo: Erin Lubin, Special To The Chronicle

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A screenshot of the One Kings Lane site taken on Nov 4th.

A screenshot of the One Kings Lane site taken on Nov 4th.

Photo: One Kings Lane

Image 3 of 3

Doug Mack, Chief Executive Officer, of the San Francisco based, One Kings Lane, an online home goods and furniture sales website, sits in the company headquarters Wednesday morning, November 2, 2011.

Doug Mack, Chief Executive Officer, of the San Francisco based, One Kings Lane, an online home goods and furniture sales website, sits in the company headquarters Wednesday morning, November 2, 2011.

Photo: Erin Lubin, Special To The Chronicle

One Kings Lane: Decor site confronts competition

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Just in time for Thanksgiving, the 17-inch Mauviel aluminum roaster for $179 - normally $300 - could be what makes or breaks this year's turkey. Unfortunately, it already sold out.

Each morning, the 3 million subscribers to One Kings Lane have a chance to jump on about six new sales for home decor, from expensive cookware to vintage furniture, all at a discount of up to 70 percent. Some items, such as a small wood key rack, cost as little as $9. Other finds cost much more, such as a one-of-a-kind Hatfield cabinet for $9,999. That sold out, too.

In what are known as flash sales, the products are available only for a few days or until they are gone. And though they represent just a fraction of the $176 billion online retail industry, they have become increasingly popular. Traffic to flash-sale sites such as San Francisco's One Kings Lane, Gilt and Zulily increased 368 percent over last year, according to Experian Hitwise. At One Kings Lane, the number of subscribers more than tripled in the past year, as has its revenue, from about $30 million last year to $100 million this year.

Two-year-old startup One Kings Lane is looking to become something more than just flash sales.

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"There's an opportunity to make the home decorating process much easier," CEO Doug Mack said. "Most consumers don't have the means to have an interior decorator, but they don't get excited about the mainstream retail chains that offer largely the same safe choices. Our team has scrubbed the globe and brought back great products in excellent taste. We put together the look for you."

Competition heats up

It's a critical time for flash-sale companies. They started to emerge in 2008, taking advantage of the sour economy. As consumers cut back spending, the sites picked up the surplus of luxury goods and sold them at a steep discount to their members. Since then, however, competition has heated up, with retail giants such as Amazon.com rolling out their own flash-sale sites. And they're all after the same inventory.

"There is less and less merchandise available for flash sales following the last recession," said Sucharita Mulpuru, a retail analyst for Forrester Research. "Manufacturers got smarter about the way they were ordering goods. They were more likely to place orders that would sell through rather than have excess inventory at the end."

Flash-sale companies have taken different tacks as a result. Gilt and Ideeli, two of the first flash-sale sites in the United States, have expanded from women's clothing and accessories to travel, men's apparel, children's goods and home decor. HauteLook, meanwhile, was acquired by Nordstrom.

Founded by Susan Feldman, who heads its merchandising team, and Alison Pincus, who manages its strategy, One Kings Lane is going in a different direction. It plans to stay focused on what it says is the $158 billion home decor market. In September, it raised $40 million in funding, bringing the total to $67 million, from Kleiner Perkins Caufield & Byers and others.

Beyond flash sales

One Kings Lane is trying to become an online destination for home decor enthusiasts, the ones who peruse the pages of Elle Decor and Martha Stewart - and want to replicate the look at a discount. Its selection of products is curated by One Kings Lane's growing merchandising team, as well as by a bevy of celebrity interior decorators and designers known as "tastemakers."

This year, the site has been adding editorial content. Next to a recent bedding sale, it published a video tutorial on how to make the perfect bed, including how to fold a fitted sheet. Last month, it began "Five Rooms in Five Days," offering tips and photographs on how to make over a kitchen, den, home office, guest room and foyer. The pieces used in the photographs were all available for sale and resulted in the company's best week of sales yet.

"We definitely have already moved beyond flash sales," Mack said. "Flash sales is definitely a great component of our business and flash sales is a fabulous industry, but that's not going to be the sole pillar of what we build our business on."

Unlike the fashion apparel industry, with famous brands such as Ralph Lauren and Vera Wang, the home decor market is much more fragmented. That's to the advantage of One Kings Lane, where many of the brands and products featured on the site aren't necessarily well known or even available for sale online.

One of them is Stark Carpet, a high-end carpet, fabric and furniture maker whose customers are mostly interior decorators rather than consumers.

Though Stark executives were initially skeptical about selling its rugs online at a discount, they decided to experiment by offering 30 to 40 of them for sale last year.

Within the first few hours, half of them were sold. Since then, it's held several more sales on One Kings Lane, increasing the number of items for sale each time.

"We realized the power of online," said Greg Rosenblatt, Stark's vice president.

'It saves a lot of time'

Heather Forbes, who runs Sayde Mark Designs, a home staging business in San Francisco, has spent about $6,000 on the site. She turns to One Kings Lane - as well as other flash-sale sites, Craigslist and eBay - for deals on furniture and accessories that she uses to make a house appealing for potential home buyers.

"You get access to things that the masses do not," Forbes said. "It saves a lot of time. I would never go look in 18 antique shops. They refine the selection for me."

There was doubt when One Kings Lane first started whether consumers would be willing to spend money on large, pricey items such as couches and rugs without having seen and touched them in person. But the company said that about 50 percent of the items listed at each event are sold out these days.

"Nobody knew when Susan and Ali started if it would work," Mack said. "But it is definitely working."

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